Derrick Manns is the assistant to the vice president for academic administration at Madonna University, Livonia, Michigan, and can be reached at email@example.com. The research he conducted for this article contributed to his doctoral dissertation for the University of Toledo. Ron Opp is associate professor and director of the Russel Center for Foundation and Leadership at the University of Toledo, Toledo, Ohio. He can be reached at firstname.lastname@example.org.
The capital renewal and replacement of the nation's public higher education facilities has been a growing problem for several decades. While the need for improved facilities has increased, access to high-tech research equipment is required. This expensive technical laboratory equipment and facilities must compete with other public priorities by federal and state policymakers. In 1990 Rush stated that most institutions have numerous capital improvement projects that are long overdue. As the age, size, and complexity of buildings continue to grow, so too does the amount of maintenance funding required to keep buildings in good working order.
Many believe that policy makers have understated the continuing decline in the state of America's educational facilities. A major national report released in 1989, The Decaying American Campus: A Ticking Time Bomb, painted a grim picture with enormous dimensions. This report estimated the total replacement value of U.S. higher education facilities to be $300 billion. It further estimated that 20 percent of these facilities required replacement and renewal at a cost of $60 billion, and classified one-third of that as "urgent needs" (Rush & Johnson, 1989).
In terms of state tax appropriations for operating budgets, experts Edward Hines (Grapevine) and Thomas Mortensen (Postsecondary Education OPPORTUNITY) generally agree that public colleges and universities have been in a belt-tightening mode since the end of the Vietnam War and the baby-boom of the early 1970s. Some argue that managing restricted budgets makes educational institutions victims of their own success. Others argue that per-student expenditures are rising due to the increased costs associated with information technology. Clearly, as institutions grow to meet a dramatic increase in the size of the college-eligible pool during the first decade of the 21st century, so too will the demand for physical facilities. To address the lack of data regarding how states are meeting public higher education capital needs, a survey was undertaken in 1998 of State Higher Education Financial Officers (SHEFOs), with the formal endorsement of the Association of Higher Education Facilities Officers (APPA).
The purpose of this study was to assess and compare state efforts to fund public higher education capital needs. A panel of experts reviewed the instrument, which investigated the following issue areas related to capital needs: financing, planning, the decision-making process used in each state, available funding, and future policy directions. In addition, key variables were correlated to the Facilities Condition Index and the Deferred Maintenance Ratio, to explore the relative strength or weakness of the relationships. A second major goal was to develop a baseline of data that might complement the existing Grapevine database tracking public higher education operating budgets.
This study was limited to public higher education within the 50 U.S. states. The study was also limited by the time frame reviewed, the 1996-1997 fiscal year, which in most cases runs from July 1 to June 30. This fiscal year corresponds to the academic year that typically starts in August or September and ends in May or June. The year selected was the most recent for which complete state finance data was available. Surveys were mailed to the SHEFOs in each state, using similar methodology to that employed for over four decades by Grapevine. From the 50 states, 41 different states responded, representing 82 percent of the 50 states.
|Responding States||Non-Responding States||Total|
|Northeast||CT, IL, IN, ME, MA, NH||MI, NY||12 of 14|
|NJ, OH, PA, RI, VT, WI||86%|
|Southeast||AL, DE, GA, KY, MD,||FL, MS, VA||9 of 12|
|NC, SC, TN, WV||75%|
|Northwest||AK, IA, ID, MN,||MT, OR, WA||8 of 11|
|NE, ND, SD, WY||73%|
|Southwest||AR, AZ, CA, CO, HI||MO||12of 13|
|KS, LA, NM, NV,||92%|
|OK, TX, UT|
|Total||41 of 50|
Primary Research Question
1. What is the current status of state tax appropriations for public higher education capital needs, including new construction, rehabilitation, and deferred maintenance? The development of ratios and percentages that allow between-state comparisons was one of the major reasons for conducting this study. Assuming states provide hard data on capital appropriations, it is possible to compare them, by controlling for full-time equivalent enrollments, to produce meaningful comparisons, so that California, for instance, can be compared with Mississippi.
Data on capital budgets were obtained from the survey. Data for operating budgets were taken from the Grapevine database. The results show that a wide disparity exists between the states in terms of their operating and capital appropriations for public higher education.
Table 2 presents comparative data on higher education operating appropriations, state population, public higher education enrollments, and spending per headcount student enrollment. Table 2 shows that, through the use of the Grapevine studies of state tax appropriations for public higher education operating budgets, an operating appropriations per headcount student enrollment figure for all 41 of the states responding to the survey could be calculated. This per student dollar figure is based upon the total operating appropriations divided by total headcount student enrollment in public higher education. The per student figure for operating appropriations ranged from a high of $7,412 in Hawaii to a low of $2,282 in New Hampshire, with an average across all states of $4,470. A state ranking of these operating appropriations per head count student enrollment was compiled, and is also presented in Table 2.
Table 3 shows that 33 of the 41 states responding to the survey instrument provided enough information to determine the capital appropriations per student headcount enrollment figure. This calculation yielded a per student dollar amount based on the amount of capital appropriations divided by the public higher education student headcount enrollment. The researcher then ranked states based on that figure. The per student figure for capital expenditures ranged from a high of $2,515 in Connecticut to a low of $0 in Wyoming, with an average among the 33 responding states of $435.
Not surprisingly, state appropriations for capital needs are far less than appropriations for operating needs. This is not to suggest that these numbers should be the same, or even close to the same, since there are inherent differences in the uses of operating versus capital funds. Still, funds must be available for capital needs if instruction, advising, research, and other common functions in higher education are to take place.
Sample and Response Rate
This exploratory national study assessed issues related to the planning, decision-making, and financing processes related to public higher education capital needs. The research instrument was developed in consultation with experts from APPA, State Higher Education Finance Officers (SHEFOs), and other persons knowledgeable about capital finance issues.
|State||1997 Enrollment State Population (thousands) a||Student Enrollment (Fall 1997 Headcount)a||State Operating Appropriations b||Operating Appropriations Per Headcount Enrollment||Rank|
The methodological approach was modeled after the Illinois State University Grapevine studies of state tax appropriations for public higher education operating budgets, in order to (a) develop a comparable national data base, and (b) to lay the foundation for a longitudinal data base of state appropriations for capital needs that builds upon the strengths of the Grapevine methodology (ability to compare effort, capacity, etc.). A response rate of 82 percent, or 41 of the 50 states, was achieved, with response rates by region (Northeast, Northwest, Southeast, and Southwest) ranging from 73 to 92 percent. The overall response rate and the response rate by region were deemed sufficient for the analysis of data described below.
The study was designed to ascertain data about the status of new facilities construction, rehabilitation, renovation, and levels of deferred maintenance at the state level. Given that this research is descriptive, coupled with the fact that literature on this topic is quite limited, state level policy makers were asked to describe "what is" in relation to policy and funding for capital needs, so as to allow for a comparative analysis of the planning, decision-making, and financing of facilities for public higher education. The
|State||1997 Enrollment State Population (thousands) a||Student Enrollment (Fall 1997 Headcount)a||State Operating Appropriations b||Operating Appropriations Per Headcount Enrollment||Rank|
Summary of Findings
1. States face a major challenge with deferred maintenance in public higher education facilities. This study documents that higher education agencies are challenged to meet deferred maintenance needs, as evidenced by the large amounts of deferred maintenance reported by many states. Finding funds for physical plant maintenance can be quite a challenge, given the increasing competition for limited resources on many college campuses (Kaiser, 1996).
2. The majority of the states do not have long-range master plans for their public higher education facilities, nor to they conduct regular facilities audits. A majority of the states do not have a master plan for public higher education facilities, nor do they conduct facilities audits on a regular basis. Comprehensive master plans for public higher education capital needs, promoted as good practice for many decades by Halstead, Glenny, Kaiser, and others, simply do not exist in the majority of the states. The lack of statewide facilities master plans needs to be considered in the context of dramatic projected increases in student enrollments predicted over the next 10 years in a number of states. The higher education agency in Texas, for example, estimates room will need to be found for over 500,000 additional students between 2000 and 2015 (Texas Higher Education Coordinating Board, 2000). Similar large growth in student enrollment is predicted for California, Florida, Arizona, Georgia, and New York (Gerald & Hussar, 1997). The influx of "Tidal Wave II" students predicted by Clark Kerr (1991) and others will serve to increase the demand for higher education facilities. Yet, neither California nor Georgia (Florida and New York did not respond) had master plans for facilities.
Federal and state policies to promote lifelong learning-for example, the federal Lifelong Learning Tax Credit-will also serve to increase demand for higher education facilities. The evolution in purposes for higher education has produced a major change in college participation rates. In a prior era, community college and public university enrollments would decline in good economic times, and rise as people needed "re-skilling" in bad economic times. Today, assisted by federal and state policies, college enrollments are rising even in states with fairly flat high school graduating class sizes. The simple fact is that there are more students starting and returning to the nation's publicly-controlled two- and four-year universities.
3. States use a variety of methods in the requesting and allocating funds for capital needs. Variability exists between states regarding processes by which they provide request and allocate for public higher education capital needs, as compared to funding operating needs. The majority of states do not use funding formulae in requesting funds for capital needs. The majority of the states allocate funds for capital needs through their legislature, rather than through their higher education agency. It is clear that state legislatures view the role of the state higher education agency much differently when it comes to the allocation of funds for capital needs, as compared to operating budget needs. Legislators usually takes pride in the appropriations for capital needs because this is something they can point to as an achievement in their tenure.
4. Dollars appropriated for facilities vary considerably between the states There is a wide variability in spending for facilities per headcount student between the states. The per headcount student figure for capital expenditures ranged from a high of $2,515 in Connecticut to a low of $0 in Wyoming, with a state average of $435.
Conclusions and Recommendations
1. The problem of facilities funding, particularly as it relates to deferred maintenance, is real. This study found that the central conclusion of both the 1989 and 1996 APPA-sponsored studies-that a ticking time bomb exists related to facilities-is true. Methodologically, the APPA studies assessed institutional data related to the Facilities Condition Index and the Deferred Maintenance Ratio using a representative sample of institutions, and then projected those results to the nation.
2. The development of comprehensive strategies to address the deferred maintenance crisis and facilities backlog have not yet occurred at the state level. It has long been generally accepted that state governing or coordinating boards should have master plans for the education of people beyond high school in their respective states. Such plans should be comprehensive in scope whenever possible, as Halstead has argued in the most in-depth treatment on the subject to date. In fact, the need for comprehensive planning across the entire state was consistently cited as a major justification and advantage for creating statewide coordinating boards and agencies in the first place. This comprehensive master plan should also include strategies for dealing with deferred maintenance in public higher education.
3. While responsibility for funding public higher education facilities is shared between the state and the institutions, authority to solve the problem has not been clearly delineated. The role of the governing board, the final authority for institutional governance, whose trustees are most often appointed by a process that involves governors, legislators, and local leaders, is specifically unclear as it relates to facilities. The board has responsibility for not only the academic entity, but for the physical plant as well (AGB & NACUBO, 1985). The multitude of methods by which facilities funding requests are developed and implemented in the request and allocation phases of the budgeting process would indicate that lines of authority and responsibility are not clearly defined between the institutions and the state, represented by the state higher education agency, governor, and legislature (Boyer, 1981).
4. The lack of adequate master planning for facilities by states contradicts their own policies designed to promote access and lifelong learning. Most states now have master plans in place that are designed to assist policymakers in meeting state higher education goals. Some of these plans are specifically tied to operating budget goals, with benchmarks to measure progress. Yet the majority of the states do not have comparable master plans for higher education facilities.
1. A permanent longitudinal data bank of state tax appropriations for public higher education facilities should be established, supported by foundations concerned with facilities. At this point there is no longitudinal database on facilities funding for public higher education to enable policy makers to determine changes over time. This study provided a single year "snap-shot" picture of state tax appropriations for public higher education facilities. A longer-term view is clearly warranted. The U.S. Department of Education, the Education Commission of the States, and the State Higher Education Executive Officers organization all have a vested interest to ensure that a longitudinal data set similar to that developed by the late Chambers, and continued by Hines and Palmer at Illinois State University, is established and continued.
With longitudinal data in hand, it may be possible to develop a set of "best practices" at the state level to assist state policy makers in legislatures, governor's offices, and higher education agencies in meeting capital needs. Due to the relative lack of literature on the subject, it is necessary to examine best practices at the institutional level, and project those to the state level. It is important to get beyond such "first order" analyses to a higher level of analysis, one that includes examination of funding formulae, actual case studies that examine the interplay of actors at the state level, and the interplay of operating and capital budgeting in both the request and allocation phase of the budget process.
2. The role of the state higher education agency in collecting good facilities information should be strengthened. State higher education agencies should routinely collect facilities data that informs their long-term state policy objectives related to access and lifelong learning.
3. The role of institutional lay governing boards in facilities oversight should be strengthened. That some states prohibit campus boards of lay governance from providing direct leadership for renewal of the physical plant would suggest the primacy of the state role in the funding of capital needs. If states truly desire the decentralization of higher education and promotion of good institutional practice, they should create state policies that promote responsible and responsive institutional governing board oversight and leadership for campus facilities.
New facilities constructed or upgraded today will likely be around in 2040, decades after any bond issue is retired. This is one of the best reasons for governing boards, the public, the business community and other interested parties to demand deployment of facilities funding. Higher education facilities will always be prominent in promotional materials, and a mainstay of campus tours. The trip to "Old University Hall" invites faculty, staff, students, and alumni to take a trip down memory lane.
Policy makers should consider a dedicated, permanent revenue stream to fund the construction, renovation, and rehabilitation of the public higher education physical infrastructure. Priorities currently in place assume an extremely limited amount of funding be allocated on an annual basis, and emphasize the improvement of existing space (patching), and deployment of limited resources now available to match available federal and private funds (attracting). Over the next several decades, the higher education enterprise will continue to require the construction, renewal and replacement of its facilities. Without adequate facilities, the academic enterprise will have difficulty meeting it fundamental societal purposes to develop talent and promote the cause of equity (Astin, 1985). Furthermore, developments in science and technology will require new investments in the research facilities on many college campuses. Because of these challenges to the physical infrastructure on two- and four-year college campuses, we recommend that the National Science Foundation and the National Institute of Health, in cooperation with APPA, SHEEO, NACUBO, and EDUCAUSE, commission a study to explore ways in which the federal and state governments can support the infrastructure needs of the American system of higher education.
Facilities will continue to be the backbone of American higher education: without buildings, research, teaching, and service cannot be conducted. Yet, public higher education in the United States has been under budget restraint and increasing public scrutiny. As a result, many state facilities budgets for public higher education have been cut or drastically reduced (Rush, 1990a). The capital renewal and replacement problem in public higher education can be solved, but it will require collaboration and coalition building among key stakeholder groups involved in public higher education at both the federal and state level. The capital needs of public higher education must be solved if the nation is to have the facilities necessary to meet the postsecondary educational needs of the 21st century (Rush, 1990b).
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